The Barista, The Ad Agencies and Social Business

by Marianne Richmond on April 10, 2011

"Starbucks Coffee"An Adweek article with the engage-y title, “Why The Average Starbucks Barista Gets More Training Than Ad Agency Staffers” caught my attention a few days ago. It had a cool infographic attached and referenced a new Arnold study on the lack of Ad Agency training, but it really wasn’t about why the average Starbucks Barista gets more training than an Ad Agency staffer….it was really a comparison between  the types of training, the time spent on training and the amount of money spent on training at Starbucks versus Ad Agencies: Starbucks more, Ad Agencies less.

The answer to “Why the Starbucks Barista gets more training than an agency staffer” is a totally different topic but one that is very relevant to another question that I have been asking lately: Why are so many Brand marketers outsourcing their social media to their Advertising and PR agencies? I have heard the many reasons: we don’t have time, we don’t have staff, it’s less expensive to have them do it. But, the flip side of that is: How important is Social Media to your Brand?

The Social Landscape 2011

Jeremiah Owyang wrote recently that as we look backwards from 2011 and see that business blogging became social media marketing which became social media and has now evolved (or matured) into social business, it is easy to forget that the social space is young and that most large corporations are just now beginning to commit resources to social media programs. Most companies in a recent Altimeter Group study have only had “formalized” social media programs for 2 1/2 years.

"Social Media Programs in Corporations"







However, companies that are at the forefront of social adoption according to another Altimeter Report are not relying on traditional advertising agencies but Social Media Boutiques even though Ad Agencies are frequently the first resource corporations use…presumably because their ad agencies are standing right next to them assuring them of the expertise in social media.

One other important finding: Even the corporations most advanced in social business who are investing in social media staffing are underspending  on training. And this, in my opinion, is a critical weakness, whether a corporation is outsourcing to their ad agencies, hiring social media boutiques or consultants, or hiring internal staff.

Brands, If you don’t understand the social space yourself, how will you evaluate the quality of your social media, your social media advisers and partners and the recommendations that they make. And worse still than ineffectual social media are social media mistakes made by those under skilled in social media competencies.

Transformation 2011

The inspiration for Adweek’s caffeinated riff on Agency training was a study presented by Andrew Benett CEO at Arnold Worldwide, the Transforming Talent Management Survey, at a recent 4 A’s conference with the title, Transformation 2011.  The only thing I know for sure about the conference is what I read and listened to online so correct me if I am missing something but it seemed to me that for a conference entitled Transformation 2011 the opening remarks sounded a lot like Denial 2011 or maybe Party Like Its 1999: “Our industry is back”…everyone watched the Superbowl (albeit passing reference to status updates) and the recession is over and now everything will be back to the way it was.

Except, it won’t.  The recession may be over but technology isn’t…technology is driving shifts in the delivery of news, entertainment and advertising and as venues change, content changes and so must the skills of the content creators, the  so called “talent”.

Mr. Benett stated that the Advertising Agency industry is in a talent crisis. Contrary to the Adweek article, Mr. Benett’s presentation was not about why the average Starbucks Barista gets more training than an Ad Agency staffer. Mr. Bennet’s presentation was about why no one wants to work in the Advertising industry. His Barista reference was an offhand, condescending comment;  but maybe Starbucks should actually  have been included on their short list of companies in their study. Maybe his comment should have been that he was going to use the Barista Principle as the standard for transforming agency management.

Howard Schultz developed the Starbucks culture based upon nurturing employee relationships and recognizing that a motivated, content workforce that was passionate about the Starbucks Brand experience would communicate that message to customers. Money was invested in employee benefits and training versus advertising. As Starbuck experts, John Moore wrote, “Starbucks spends its advertising dollars on making better products and better customer experiences and not on making funnier television commercials.”

Starbucks continues, year after year,  to excel in all of the measurements Mr. Benett mentions that the Advertising Industry is currently failing at: Attracting, retaining and developing talent. The use of the word “talent” kind of sums up the problem. Maybe it’s just me, but it creates a visual of  an anchorman who reads the news versus the Barista who creates the experience.

Listening to Mr. Benett speak, about their survey, their “talent crisis” and their recommendations for transformation made me understand not only why there was a “talent crisis” but also why advertising agencies don’t get social media: It’s a culture issue driven by a business model. Social media is about people, building relationships…about connection and two way dialogue.  Advertising is about selling, campaigns and one way communication. The “talent crisis” seems to be all about disconnection and the solutions sound like a broadcast or re-boadcast of a lot of disconnected thoughts: Talent Crisis, The Ad Campaign.

First of all, they conducted their “expansive talent study” using what they referred to as “talent centric” organizations as benchmarks. Arnold interviewed companies that Benett refers to as “talent centric organizations” e.g. Goldman Sachs, Mackenzie, P&G, Google,  as a baseline for comparison to Ad Agencies. They didn’t interview anyone at Starbucks. Mr. Benett’s  first comment was telling; he said the issue of talent management critical  to the advertising industry and then he observed that the room was not full and noted that perhaps this indicated that only 1/3 of the industry cared about the issue. Transformation is a tall order without senior management interest and commitment isn’t it?

Second of all, although I am  not exactly sure what led them to conduct this study other than that they decided that were not “talent magnets.”  I am even less sure as to why they included Goldman Sachs. However, it seems to me that what was lacking in both Mr. Benett’s presentation and his slides was the vision thing….apparently the current organization/industry make up (the talent) is not meeting the Agencies/industry strategic needs? Thus at the end of the transformation what will the organization look like? Is the crisis that the you are not a “talent magnet” or is the crisis that the talents that ad agency people will need in the future (now) need to be defined so that the transformation has direction.

For Advertising agencies, the product is the advertising which is created by “the talent”….Agencies invest in hiring talent. Mr Benett notes that talent is the Ad industries #1 asset but points out that the talent feels it is underpaid, untrained, and uninformed.  The funny thing? A visit to the Arnold website and the headline is Jack Daniel’s Appoints Arnold to Create Global Social Media Campaign which obviously reinforced to me my opinion that Ad Agencies view social media as another advertising channel but a visit to the people page or the Agency life page and wow, the talent sure doesn’t seem like they feel underpaid, untrained and uninformed. Which I  guess is the good news for the power of advertising and the bad news for honesty, transparency and those other social values.

As memory serves, (I was “trained” in Brand Management then moved to the Agency world; later as a freelance consultant was frequently hired by Ad Agencies to provide the “strategic” component that they lacked for client assignments or new business pitches, pre social media) Ad agencies never placed much emphasis on developing talent, training, employee benefits or relationships. At entry levels and even at mid levels the pay, benefits, and training were better on the Client side.  And in a pre-social world it wasn’t such a problem. Ad Agencies created advertising not relationships. They created Brands certainly, but not Brand experience.

Then quietly, social media walked in; blogs, Facebook and Twitter first ignored, then disdained and finally discovered by Ad Agencies who then started slinging the jargon as loudly a possible without taking much time to understand…. “OK, here’s the concept, the cat will write the blog…..” Oh yeah! (True story). But, the blog writing cat was advertising content, not social media content. And good social media content demands different skill sets and different talents than advertising content and the social world is constantly evolving so that training and development need to be built into employee relationships.

The Barista Principle

We’ve all heard the story of Howard’s Schultz’s trip to Italy where he was inspired by the ambiance of Italian coffee bars and the role of the Barista in nurturing the customer experience. Schultz turned a commodity product into a billion dollar Branded experience by creating a company culture that is relationship centric and this relationship begins with its employees… Starbucks core values emphasize keeping employees motivated and empowered because their connection to the customer creates the Brand experience. Baristas receive training in customer service as well as in coffee and learn how to connect with customers.

Ranjay Gulati, Sarah Huffman, and Gary Neilson wrote about the Barista principle in a 2002 study stating that Starbucks exemplifies the model of a relationship-centric organization building relationships with 4 constituencies: customers, suppliers, alliance partners and their own employees. “These relationships are so valuable that they should be considered a core asset of a firm. We call this asset “relationship capital” and define it as the value of a firm’s network of relationships with its customers, suppliers, alliance partners and employees.”

Now, as we also know Starbucks was slow to social media adoption even though the Barista Principle and Peter Kim’s definition of Social Business Design have a lot in common. Social Business Design: is the intentional creation of dynamic and socially calibrated systems, process, and culture. Its goal: helping organizations improve value exchange among constituents.

So, why are Starbucks Baristas trained better than an agency staffer? Because Starbucks places a high value on relationships and Agencies do not. And in 2011, as the Barista is dismissed by Mr. Benett as a coffee shop employee, and social media has evolved into social business while the transformative 5 big ideas are:

  • recruit on college campuses
  • promote cross training
  • incentives such as relocation,
  • engage employees in “the conversation.”

These are all nice things but will they make the Ad Industry talent magnets by simply catching up with their talent competitors. Case in point, I happened to notice while looking at their website that Arnold is recruiting for summer interns but not offering compensation. And they wonder why Goldman Sachs and P&G are Talent Magnets on campus and they are not. And missing (and dismissing)  the value of the Starbucks Barista make me wonder what Mr. Benett means by “conversation” .

So, in 2011 Social Media has definitely “arrived” for most, but those who don’t take the time to understand it and its value are underestimating its power. As Jeremiah noted, business blogging became social media which is now social business, at least for those who realize that soon it will just be business. David Armano has a post up today titled Campaigns and Ecosystems which was a reaction to an article critical of social media agencies.

David writes: “But the businesses which succeed in the long run (and the CEO’s driving them), understand that it’s the coordination of a good product and service, combined with an integration of ecosystems, support and marketing initiatives which will result in long term value for not ony customers but all stakeholders.” I agree. I think the Starbucks Barista would agree. I singled out ad agencies; others point at social media agencies, social media consultants point at each other. It’s not about which discipline “gets it” best, it’s about getting it yourself, for your Brand, and then bringing in the relevant advisers and agencies and staff.


BUT What Will I Do With My OLD iPad??

by Marianne Richmond on March 8, 2011

I wrote recently about cutting the cord , i.e. canceling cable TV and watching TV programming online and “over the air.”  We did it in December and for me, so far so good. I haven’t decided whether its better…it probably isn’t. But then again, it’s not worse. It’s just different.

My 18 year old son, Sam, whose day begins and ends with Sports Center is not even close to liking it. His tolerance for this kind of trial and error is low…he can’t conceptualize that since you can turn something on (the TV) and press a button (on the remote) and have the wide world of sports (and everything else)  at your fingertips, why anyone would want to add extra steps (e.g. connecting an AppleTV, pressing HDMI2 and then Netflix) even to try. This resistance to extra steps (inertia?) is probably not atypical which is why cord cutting, despite the headlines and predictions about the immediate  death of cable are overstated.

Overstated yes, but cable TV is old media and the old media model is dying…..TV is not dying (in my opinion, its actually improved), magazines, newspapers are not dying, but the distribution model, the business model is on life support. Scott Karp does a great job explaining the disruption of the news syndication model…he mentions the distribution of news on social networks, the growing importance of social curation in content distribution vs search (though search is not at all even in the doctor’s waiting room, much less on life support and social is not separate from search) and the impact of free web content.

This is not just what is disrupting the news syndication model….it is what has disrupted media period. Let’s go back to the dawn of social….publishing platforms, web 2.0, Cluetrain; so really not so long ago in real time (2003:O’Reilly Web 2.0 Media Conference) and here we are today with Twitter, Facebook, Netflix. Follow me, friend me, check in, streaming live are part of the daily vernacular of #everyoneweknow#everyonewearerelatedto based upon media businesses that didn’t exist a few minutes ago. And all of the accompanying shifts in ownership, layoffs, chapter 11’s and so on in publishing and broadcast media businesses and the mad scrambling to effectively integrate the old with the new which is in the end, all about control.

And cutting the cord is one part of this disruption….I was spending over $70 a month for a “bundle” that defied logical explanation or understanding from a  cable company that only delivers their high quality customer service on Twitter and whose annoying advertising campaign that depict people who love watching TV as an endangered species are reason enough to cut the cord. Now the consumer benefit in those spots is where?  The issue, cable company, is delivering value to customers who have lots of content choices unless there really are enough couch potatoes longing for the good old analog days.

So, was there a seminal moment when media changed for good? April 2010, the iPad. The iPad brought it all together. One year ago it was not together. It was all over the desk top and the laptop and the mobile device and there were user experiences and user interfaces. With the iPad there is user experience and user interface. One year and over 9MM iPads and 40,000 Apps.

According to the Donald J Reynolds Institute at the University of Missouri School of Journalism (Sam Richmond will be a freshman there this fall I am proud to report) the quality of the user experience, the ease of the user interface, and the pricing of Apps and content are the reasons that users are spending quality time on their iPads. For the inertia demographic who need the seamless experience and who have $500, iPad is a life changer.

So back to the issue underlying Sam’s resistance to ending cable: too many steps for an unknown reward?  Well, he already has a PS3 that is connected to his TV for games. One little thumb nudge and he gets Netflix, HuluPlus, MLB.Live, movies and TV shows on demand. Ah, ESPN is not there. Life will not be perfect until then….if cable can control live sports distribution they are still in the game.

Now, it is March 2011 and in a few days iPad2 will be available. It will have a camera (important!), it will be lighter (not so important), and according to the New York Times (but really DARRELL ETHERINGTON of GigaOm) the killer feature is HD mirroring which he explains means that one can stream content from Netflix, Hulu Plus etc directly to a TV with an HDMI cord and adaptor without the need for the $99 AppleTV that you might have just purchased (the one that you can not stream HuluPlus on). I am sure there is more.

So, this leads to my conundrum…like Marshall Kirkpatrick who wrote last year that he was going to get an iPad right away. He said life is short and he felt he had missed out by waiting to get an iPhone and wanted to begin enjoying an iPad as soon as possible. I felt the same way…and right now I am waiting to get the new iPhone this summer. First I was waiting for Verizon, now the new iPhone…my contract has been up for a year. But the iPad2? I LOVE my iPad. I am sure the iPad2 is better. But my iPad is still shiny and new and I still find new things to do on it….sigh.




Merry Christmas 2010!

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